Budget Background

Feb062014

A Chart Book

The great public policy question of whether the United States should continue admitting about 1 million immigrants a year under current law, or triple that number as proposed in the recently passed Senate bill, has now come to the House. This question is momentous not only because our immigration system needs reforming, but primarily because proposals to do so include massive increases in migrant flows in addition to the legalization of millions currently residing in the U.S. illegally. Given the poor state of the economy and the abysmal condition of the federal budget, immigration reform has become the cutting edge in a vigorous debate over our country’s economic future and reform of federal programs that drive unsustainable annual deficits.

Significantly increasing the inflow of immigrants would adversely shock an already weak economy, lower average wages, increase unemployment, and decrease each American’s share of national output. As the Congressional Budget Office observed in its evaluation of the Senate’s effort to increase immigration, the economy might be bigger because it would contain more people, but it would not be stronger. GDP per person would actually decline. Considering the acute, current weakness of labor markets and the slowest economic recovery since the end of World War II, the last thing the U.S. economy needs is an enormous, harmful economic shock.

We focus on key indicators of distress in labor markets. The millions of Americans who are unemployed, underemployed, or who have dropped out of the labor force entirely will be the first to feel the adverse effects of job competition from additional immigrants. We then touch on the desperate condition of working family incomes. And the chart book concludes by reviewing CBO’s analysis of the Senate comprehensive reform bill.